New Delhi, May 7, 2025 — The recently concluded Free Trade Agreement (FTA) between India and the United Kingdom has sparked new optimism in the Indian stock market, offering promising opportunities for investors. Prime Minister Narendra Modi, while announcing the historic pact, highlighted its potential to boost trade, investment, employment, and innovation between the two nations. A distinctive feature of the agreement is the "Double Contribution Convention," designed to streamline social security benefits for professionals working across both countries.
Impact of the FTA on the Stock Market
The FTA eliminates tariffs on 99.3% of animal products, 98.9% of vegetable/oil products, and 97.9% of processed foods. In addition, 97.6% of textile and apparel products, 100% of gems and jewelry, and 98.6% of chemicals will now be exported duty-free to the UK. This opens the door for India to increase its footprint in the UK’s $34 billion agricultural imports, $20 billion textile market, and $5 billion jewelry segment.
Sectors and Companies to Watch
1. Agriculture and Processed Food Sector
Analysts expect this sector to benefit the most, especially due to the UK’s strong demand for Indian basmati rice, spices, and processed food products.
LT Foods Ltd (NSE: LTFOODS), known for its “Daawat” brand, is a major exporter to the UK, with nearly 30% of its export share coming from the region. With a market cap of approximately ₹10,000 crore, the stock has shown consistent strength in recent quarters.
Godrej Agrovet Ltd (NSE: GODREJAGRO), with its presence in poultry and dairy exports, stands to gain from duty-free access. The company has a market cap of ₹15,000 crore and has demonstrated resilience backed by export growth.
BASF India Ltd (NSE: BASF), which provides agri-solutions for export-oriented crops, is also poised for gains. With a market capitalization of ₹36,000 crore, the stock has benefited from the sustainable agriculture trend.
2. Textile and Apparel Sector
With 97.6% of tariff lines eliminated, Indian textile firms are well-positioned to expand in the UK’s $20 billion import market.
Trident Ltd (NSE: TRIDENT), specializing in home textiles, already supplies to several UK retailers. With a market cap of ₹20,000 crore, its stock has remained attractive on the back of steady export growth.
KPR Mill Ltd (NSE: KPRMILL), a leader in knitwear and cotton garments, exports to UK-based retailers such as Primark. The company has a ₹30,000 crore market cap and has shown sustained upward momentum.
3. Gems and Jewelry Sector
With complete tariff elimination in this category, major players are expected to see expanded exports.
Titan Company Ltd (NSE: TITAN), with its flagship brands like Tanishq and CaratLane, is positioned to enhance its UK footprint. With a market cap exceeding ₹3 lakh crore, it remains a strong market performer.
Rajesh Exports Ltd (NSE: RAJESHEXPO), a global leader in gold jewelry exports, may solidify its position in the UK market. Its market cap currently stands at ₹25,000 crore.
Investor Takeaways
This agreement is likely to improve revenue and margins for companies with existing UK exposure, leading to potential rallies in their share prices. However, investors must remain cautious of risks such as global competition—particularly from countries like China and Bangladesh in the textile sector—and the UK’s stringent quality norms. Long-term investors may find steady growth in sectors where Indian companies already enjoy strong UK presence.
Looking Ahead
Prime Minister Modi has expressed a desire to welcome UK Prime Minister Keir Starmer to India soon, signaling deeper strategic cooperation ahead. For market participants, this deal marks a turning point in India’s expanding global trade influence. Those with a keen eye on the right sectors and companies could find this FTA to be a golden investment opportunity.
(Note: Investors are advised to consult financial experts before making any stock market decisions.)
